EXHIBIT 4.5
SECURITIES PURCHASE AGREEMENT
BY AND BETWEEN
TONTINE CAPITAL PARTNERS, L.P.
AND
ENGLOBAL CORPORATION
SEPTEMBER ___, 2005
TABLE OF CONTENTS
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Page
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ARTICLE 1 Definitions.........................................................1
ARTICLE 2 Purchase and Sale of Shares.........................................3
2.1 Purchase of Shares...............................................3
2.2 Purchase Price and Form of Payment; Delivery.....................3
2.3 Closing Date.....................................................3
ARTICLE 3 Buyer's Representations and Warranties..............................3
3.1 Organization and Qualification...................................3
3.2 Authorization; Enforcement.......................................3
3.3 Securities Matters...............................................4
3.4 Information......................................................4
3.5 Restrictions on Transfer.........................................4
ARTICLE 4 Representations and Warranties of the Company.......................5
4.1 Organization and Qualification...................................5
4.2 Authorization; Enforcement.......................................5
4.3 Capitalization; Valid Issuance of Shares.........................5
4.4 No Conflicts.....................................................6
4.5 SEC Documents; Financial Statements..............................7
4.6 Absence of Certain Changes.......................................7
4.7 Absence of Litigation............................................8
4.8 Patents, Copyrights..............................................8
4.9 Tax Status.......................................................8
4.10 Permits; Compliance..............................................8
4.11 Environmental Matters............................................9
4.12 Title to Property...............................................10
4.13 No Investment Company or Real Property Holding Company..........10
4.14 No Brokers......................................................10
4.15 Registration Rights.............................................10
4.16 Exchange Act Registration.......................................10
4.17 Labor Relations.................................................11
4.18 Transactions with Affiliates and Employees......................11
4.19 Insurance.......................................................11
4.20 Application of Takeover Protections.............................11
4.21 Disclosure......................................................11
ARTICLE 5 Covenants..........................................................12
5.1 Form D; Blue Sky Laws...........................................12
5.2 Use of Proceeds.................................................12
5.3 Expenses........................................................12
5.4 Listing.........................................................12
5.5 No Integration..................................................12
5.6 Restriction on Short Sales......................................12
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ARTICLE 6 Conditions To The Company's Obligation.............................13
6.1 Delivery of Transaction Documents...............................13
6.2 Payment of Purchase Price.......................................13
6.3 Representations and Warranties..................................13
6.4 Litigation......................................................13
ARTICLE 7 Conditions to Each Buyer's Obligation..............................13
7.1 Delivery of Transaction Documents; Issuance of Shares...........13
7.2 Representations and Warranties..................................13
7.3 Consents........................................................14
7.4 Litigation......................................................14
7.5 Opinion.........................................................14
7.6 No Material Adverse Change......................................14
7.7 Board Approval..................................................14
ARTICLE 8 Indemnification....................................................14
8.1 Indemnification by the Company..................................14
8.2 Notification....................................................14
ARTICLE 9 Governing Law; Miscellaneous.......................................15
9.1 Governing Law...................................................15
9.2 Counterparts; Electronic Signatures.............................15
9.3 Headings........................................................15
9.4 Severability....................................................15
9.5 Entire Agreement; Amendments....................................15
9.6 Notices.........................................................16
9.7 Successors and Assigns..........................................17
9.8 Third Party Beneficiaries.......................................17
9.9 Publicity.......................................................17
9.10 Further Assurances..............................................17
9.11 No Strict Construction..........................................17
9.12 Rights Cumulative...............................................17
9.13 Survival........................................................17
9.14 Knowledge.......................................................17
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SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT, dated as of September ___, 2005, is
entered into by and among ENGLOBAL CORPORATION, a Nevada corporation (the
"Company"), and TONTINE CAPITAL PARTNERS, L.P., a Delaware limited partnership
(the "Buyer").
RECITALS:
A. The Company and the Buyer are executing and delivering this Agreement in
reliance upon the exemptions from securities registration afforded by Section
4(2) of the 1933 Act and Rule 506;
B. The Buyer desires to purchase and the Company desires to issue and sell,
upon the terms and conditions set forth in this Agreement, 2,000,000 shares of
common stock, par value $0.001 per share of the Company;
C. Certain members of the Company's management are, substantially
simultaneously with the sale of the Shares pursuant to this Agreement, offering
up to 1,000,000 shares of Common Stock to other individuals and entities
pursuant to separate subscription agreements (the "Secondary Offering"); and
D. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto and the purchasers in the Secondary Offering are executing and
delivering a Registration Rights Agreement, in the form attached hereto as
Exhibit A, pursuant to which the Company has agreed under certain circumstances
to register the resale of the Shares under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
AGREEMENT
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
ARTICLE 1
DEFINITIONS
"2005 SEC Documents" has the meaning set forth in Section 3.4.
"Action" means any action, suit claim, inquiry, notice of violation,
proceeding (including any partial proceeding such as a deposition) or
investigation against or affecting the Company, any of its Subsidiaries or any
of their respective properties before or by any court, arbitrator, governmental
or administrative agency, regulatory authority (federal, state, county, local or
foreign), public board, stock market, stock exchange or trading facility.
"Agreement" means this Securities Purchase Agreement.
"Buyer" has the meaning set forth in the preamble.
"Common Stock" means the Company's common stock, par value $0.001 per
share.
"Company" has the meaning set forth in the preamble.
"Closing" has the meaning set forth in Section 2.3.
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"Closing Date" means September [__], 2005 or such other time as may be
mutually agreed upon by the parties to this Agreement.
"Environmental Laws" has the meaning set forth in Section 4.11.
"Hazardous Materials" has the meaning set forth in Section 4.11.
"Intellectual Property" has the meaning set forth in Section 4.8.
"Investment Company" has the meaning set forth in Section 4.13.
"Legal Requirement" means any federal, state, local, municipal, foreign,
international, multinational or other law, rule, regulation, order, judgment,
decree, ordinance, policy or directive, including those entered, issued, made,
rendered or required by any court, administrative or other governmental body,
agency or authority, or any arbitrator.
"Material Adverse Effect" means any material adverse effect on the
business, operations, assets, financial condition or prospects of the Company.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Permits" has the meaning set forth in Section 4.10.
"Placement Agents" has the meaning set forth in Section 4.14
"Purchase Price" means a price of $7.00 per share for the Shares to be
issued and sold to the Buyer at the Closing.
"Registration Rights Agreement" means the Registration Rights Agreement
executed and delivered contemporaneously with the Agreement pursuant to which
the Company has agreed under certain circumstances to register the resale of the
Shares under the 1933 Act and the rules and regulations promulgated thereunder,
and applicable state securities laws.
"Rule 506" means Rule 506 of Regulation D promulgated under the 1933 Act.
"SEC" means the United States Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 4.5.
"Shares" means the 2,000,000 shares of Common Stock being issued and sold
under the Agreement.
"Subsidiaries" means, with respect to the Company, ENGlobal Corporate
Services, Inc., a Texas corporation, ENGlobal Constant Power, Inc., a Texas
corporation, ENGlobal Engineering, Inc., a Texas corporation, ENGlobal Systems,
Inc., a Texas corporation, ENGlobal Construction Resources, Inc., a Texas
corporation, RPM Engineering, Inc., d/b/a ENGlobal Engineering, Inc., a
Louisiana corporation, ENGlobal Automation Group, Inc., a Texas corporation,
ENGlobal Canada ULC, a Nova Scotia unlimited liability company, ENGlobal Design
Group, Inc., a Texas corporation, Thermaire, Inc., a Texas corporation, PEI
Investments JV, a Texas joint venture, and EPIC ENGlobal, LLC, a Texas limited
liability company.
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"Transaction Documents" means this Agreement, the Registration Rights
Agreement, and any other documents contemplated by this Agreement.
"Transfer Instructions" has the meaning set forth in Section 2.2.
ARTICLE 2
PURCHASE AND SALE OF SHARES
2.1 Purchase of Shares. Subject to the terms and conditions of this
Agreement, on the Closing Date, the Company shall issue and sell the Shares and
the Buyer shall purchase the Shares from the Company.
2.2 Purchase Price and Form of Payment; Delivery. On the Closing Date the
Buyer shall pay $7.00 per share for the Shares to be issued and sold to it at
the Closing. The Purchase Price shall be paid by wire transfer of immediately
available funds in accordance with the Company's written instructions. At the
Closing, upon payment of the Purchase Price therefore by the Buyer, the Company
will deliver irrevocable written instructions ("Transfer Instructions") to the
transfer agent for the Company's Common Stock to issue certificates representing
the Shares registered in the name of the Buyer and to deliver such certificates
to or at the direction of the Buyer. The Company shall not have the power to
revoke or amend the Transfer Instructions without the written consent of the
Buyer.
2.3 Closing Date. Subject to the satisfaction (or written waiver) of the
conditions set forth in Article 6 and Article 7 below, the closing of the
transactions contemplated by this Agreement shall be held on September [__],
2005, or such other time as may be mutually agreed upon by the parties to this
Agreement, at the offices of Jenkens & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or at such other location or by such other method
(including exchange of signed documents) as may be mutually agreed upon by the
parties to this Agreement ("Closing").
ARTICLE 3
BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer represents and warrants to the Company that:
3.1 Organization and Qualification. The Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the state of
Delaware, with full power and authority to purchase the Shares.
3.2 Authorization; Enforcement. This Agreement and each of the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by, and duly executed
and delivered on behalf of, the Buyer. This Agreement and each of the other
Transaction Documents constitutes the valid and binding agreement of the Buyer
enforceable in accordance with its terms, except as such enforceability may be
limited by: (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws in effect that limit creditors' rights generally; (ii)
equitable limitations on the availability of specific remedies; and (iii)
principles of equity.
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3.3 Securities Matters. In connection with the Company's compliance with
applicable securities laws:
a. The Buyer understands that the Shares are being offered and sold to
it in reliance upon specific exemptions from the registration requirements
of United States and state securities laws and that the Company is relying
upon the truth and accuracy of, and the Buyer's compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of the Buyer set forth herein in order to determine the availability of
such exemption and the eligibility of the Buyer to acquire the Shares.
b. The Buyer is purchasing the Shares for its own account, not as a
nominee or agent, for investment purposes and not with a present view
towards resale, except pursuant to sales exempted from registration under
the 1933 Act, or registered under the 1933 Act as contemplated by the
Registration Rights Agreement.
c. The Buyer is an "accredited investor" as that term is defined in
Rule 501(a) of Regulation D under the 1933 Act, and has such knowledge and
experience in financial and business matters as to be capable of evaluating
the merits and risks of an investment in the Shares. The Buyer understands
that its investment in the Shares involves a significant degree of risk.
The Buyer understands that no United States federal or state agency or any
other government or governmental agency has passed upon or made any
recommendation or endorsement of the Shares.
3.4 Information. The Buyer has conducted its own due diligence examination
of the Company's business, financial condition, results of operations, and
prospects. In connection with such investigation, Buyer and its representatives
(i) have reviewed the Company's most recent annual report on Form 10-K, the
Company's quarterly reports on Form 10-Q for the two most recently concluded
interim periods, the Company's proxy statement on Schedule 14A filed on April
29, 2005, the Company's Registration Statement on Form S-8 filed on August 24,
2005, and the Company's Current Reports on Form 8-K filed on January 31, 2005,
March 31, 2005, and August 12, 2005 (collectively, the "2005 SEC Documents"),
and (ii) have been given an opportunity to ask questions, to the extent Buyer
considered necessary, and have received answers from, officers of the Company
concerning the business, finances and operations of the Company and information
relating to the offer and sale of the Shares.
3.5 Restrictions on Transfer. The Buyer understands that except as provided
in the Registration Rights Agreement, the issuance of the Shares has not been
and is not being registered under the 1933 Act or any applicable state
securities laws. The Buyer may be required to hold the Shares indefinitely and
the Shares may not be transferred unless (i) the Shares are sold pursuant to an
effective registration statement under the 1933 Act, or (ii) the Buyer shall
have delivered to the Company an opinion of counsel to the effect that the
Shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration, which opinion shall be reasonably acceptable
to the Company. The Buyer understands that until such time as the resale of the
Shares has been registered under the 1933 Act as contemplated by the
Registration Rights Agreement or otherwise may be sold pursuant to an exemption
from registration, certificates evidencing the Shares may bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates evidencing such Shares):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE AND HAVE BEEN ISSUED IN RELIANCE
UPON EXEMPTIONS AFFORDED UNDER APPLICABLE LAWS. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
HYPOTHECATED, TRANSFERRED OR OTHERWISE ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, OR AN APPLICABLE EXEMPTION (AS TO
WHICH THE ISSUER SHALL BE REASONABLY SATISFIED, INCLUDING RECEIPT OF
AN ACCEPTABLE LEGAL OPINION) FROM THE REGISTRATION REQUIREMENTS OF
SUCH LAWS."
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company's Disclosure Schedule attached hereto,
the Company represents and warrants to the Buyer that:
4.1 Organization and Qualification. The Company has no subsidiaries other
than the Subsidiaries. The Company and each of its Subsidiaries is a
corporation, limited partnership, limited liability company, unlimited liability
company or joint venture, as applicable, duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated or
organized, with corporate or limited partnership power and authority to own,
lease, use and operate its properties and to carry on its business as now
operated and conducted. The Company and each of its Subsidiaries is duly
qualified as a foreign corporation or limited partnership to do business and is
in good standing in each jurisdiction in which its ownership or use of property
or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so qualified or in good standing would
not have a Material Adverse Effect. Neither the Company nor any Subsidiary is in
violation of any provision of its respective certificate or articles of
incorporation, partnership agreement, bylaws or other organizational or charter
documents, as the same may have been amended.
4.2 Authorization; Enforcement. The Company has all requisite corporate
power and authority to enter into and perform this Agreement and each of the
other Transaction Documents and to consummate the transactions contemplated
hereby and thereby and to issue the Shares, in accordance with the terms hereof
and thereof. The execution and delivery of this Agreement and each of the other
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including without limitation, the
issuance of the Shares) have been duly authorized by the Company's Board of
Directors and no further consent or authorization of the Company, its Board of
Directors, or its shareholders is required. This Agreement and each of the other
Transaction Documents have been duly executed and delivered by the Company. This
Agreement and each of the other Transaction Documents will constitute upon
execution and delivery by the Company, a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by: (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws in effect that limit creditors'
rights generally; (ii) equitable limitations on the availability of specific
remedies; (iii) principles of equity (regardless of whether such enforcement is
considered in a proceeding in law or in equity); and (iv) to the extent rights
to indemnification and contribution may be limited by federal securities laws or
the public policy underlying such laws.
4.3 Capitalization; Valid Issuance of Shares. As of the date hereof, the
authorized capital stock of the Company consists of 75,000,000 shares of Common
Stock, of which 23,966,283 shares are issued and outstanding, and 652,377 shares
are held by the Company as treasury shares, and 2,265,167 shares of preferred
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stock, $.001 par value, all of which are designated as Series A redeemable
convertible preferred stock, and none of which are outstanding. All of such
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and nonassessable. The Shares have been duly authorized and when issued
pursuant to the terms hereof will be validly issued, fully paid and
nonassessable and will not be subject to any encumbrances, preemptive rights or
any other similar contractual rights of the shareholders of the Company or any
other person. No shares of capital stock of the Company are subject to
preemptive rights or any other similar rights of the shareholders of the Company
or any liens or encumbrances imposed through the actions or failure to act of
the Company. As of the date hereof, the Company had outstanding options to
purchase 1,399,355 shares of Common Stock, as well as 2,086,769 shares of Common
Stock that may be issued under its Employee Stock Purchase Plan. As of the date
of this Agreement, except to the extent described in the preceding sentence and
Schedule 4.3 attached hereto, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is
or may become bound to issue additional shares of capital stock, (ii) there are
no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of its or their securities under the
1933 Act (except the Registration Rights Agreement) and (iii) there are no
anti-dilution or price adjustment provisions contained in any security issued by
the Company (or in any agreement providing rights to security holders) that will
be triggered by the issuance of the Shares. Except as may be described in any
documents which have been publicly filed by any of the Company's shareholders,
to the Company's knowledge, there are no agreements between the Company's
shareholders with respect to the voting or transfer of the Company's capital
stock or with respect to any other aspect of the Company's affairs.
4.4 No Conflicts. The execution, delivery and performance of this Agreement
and each of the other Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of Shares) will not (i) conflict with or result
in a violation of any provision of the Restated Articles of Incorporation, as
amended, of the Company or the bylaws, as amended, of the Company, (ii) violate
or conflict with, or result in a breach of any provision of, or constitute a
default (or an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture, patent,
patent license or instrument to which the Company or any of its Subsidiaries is
a party, or (iii) result in a violation of any Legal Requirement (including
federal and state securities laws and regulations and regulations of any
self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or affected
(except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries
is in violation of its Certificate or Articles of Incorporation, bylaws or other
organizational documents and neither the Company nor any of its Subsidiaries is
in default (and no event has occurred which with notice or lapse of time would
result in a default) under, and neither the Company nor any of its Subsidiaries
has taken any action or failed to take any action that would give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement
or instrument to which the Company or any of its Subsidiaries is a party or by
which any property or assets of the Company or any of its Subsidiaries is bound
or affected, except for possible defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. Except with respect to any additional
listing applications and other filings related to the listing of the Shares to
be filed with the American Stock Exchange as specifically contemplated by this
Agreement and as required under the 1933 Act and any applicable state securities
laws, the Company is not required to obtain any consent, authorization or order
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of, or make any filing or registration with, any court, governmental agency,
regulatory agency, self regulatory organization or stock market or any third
party in order for it to execute, deliver or perform any of its obligations
under the Transaction Documents. All consents, authorizations, orders, filings
and registrations that the Company is required to effect or obtain pursuant to
the preceding sentence have been obtained or effected on or prior to the date
hereof.
4.5 SEC Documents; Financial Statements.
a. Since December 31, 2003, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1933 Act and the 1934 Act
(all of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents (other than
exhibits to such documents) incorporated by reference therein, being hereinafter
referred to herein as the "SEC Documents"), or has timely filed for a valid
extension of such time of filing and has filed any such SEC Documents prior to
the expiration of any such extension. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
b. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may not
include footnotes, year end adjustments or may be condensed or summary
statements) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the financial
statements of the Company included in the SEC Documents, the Company has no
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to December 31, 2004, and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in such financial statements, which, individually or taken in the
aggregate would not reasonably be expected to have a Material Adverse Effect.
c. The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act). Such
disclosure controls and procedures: (A) are designed to ensure that material
information relating to the Company and its Subsidiaries is made known the
Company's chief executive officer and its chief financial officer by others
within those entities, particularly during the periods in which the Company's
reports and filings under the 1934 Act are being prepared, (B) have been
evaluated for effectiveness as of the end of the most recent annual period
reported to the SEC, and (C) are effective to perform the functions for which
they were established.
4.6 Absence of Certain Changes. Except with respect to the transactions
contemplated hereby and by each of the other Transaction Documents and except as
disclosed in the 2005 SEC Documents or in Schedule 4.6, since December 31, 2004,
(i) the Company and each of its Subsidiaries has conducted its business only in
the ordinary course, consistent with past practice, and since that date, no
changes have occurred which would reasonably be expected to have a Material
7
Adverse Effect; and (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables, accrued expenses and
other liabilities incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected on the Company's
financial statements pursuant to GAAP or required to be disclosed in filings
made with the SEC.
4.7 Absence of Litigation. There is no Action pending or, to the knowledge
of the Company or any of its Subsidiaries, overtly threatened against or
affecting the Company or any of its Subsidiaries that (i) adversely affects or
challenges the legality, validity or enforceability of the Agreement, or (ii)
would, if there were an unfavorable decision, have or reasonably be expected to
have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries,
nor any director or officer thereof (in his or her capacity as such), is or has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty.
There has not been, and to the knowledge of the Company, there is not pending
any investigation by the SEC involving the Company or any current or former
director or officer of the Company (in his or her capacity as such). The SEC has
not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the 1934 Act or the ▇▇▇▇ ▇▇▇.
4.8 Patents, Copyrights. The Company and each of its Subsidiaries owns or
possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, copyrights,
trademarks, trademark applications, service marks, service names, trade names
and copyrights ("Intellectual Property") necessary to enable it to conduct its
business as now operated (and, to the Company's knowledge, as presently
contemplated to be operated in the future); there is no claim or Action by any
person pertaining to, or proceeding pending, or to the Company's knowledge
threatened, which challenges the right of the Company or of a Subsidiary with
respect to any Intellectual Property necessary to enable it to conduct its
business as now operated and to the Company's knowledge, the Company's or its
Subsidiaries' current products and processes do not infringe on any Intellectual
Property or other rights held by any person, except where any such infringement
would not reasonably be expected to have a Material Adverse Effect.
4.9 Tax Status. The Company and each of its Subsidiaries has made or filed
all federal, state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. Except as set forth in Schedule 4.9, there are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim. The Company has not executed a waiver with respect to the statute of
limitations relating to the assessment or collection of any foreign, federal,
state or local tax.
4.10 Permits; Compliance.
a. The Company and each of its Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted (collectively, "Permits"), except where the failure to have any such
Permit would not result in a Material Adverse Effect, and there is no Action
pending or, to the knowledge of the Company, threatened regarding suspension or
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cancellation of any of the Permits. Neither the Company nor any of its
Subsidiaries is in conflict with, or in default or violation of, any of the
Permits, except for any such conflicts, defaults or violations which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
b. Since December 31, 2004, except as set forth in any 2005 SEC
Document and except with respect to comments received from the SEC to the
Company's Annual Report on Form 10-K for the period ended December 31, 2004,
which are described on Schedule 4.10 hereto, no event has occurred or, to the
knowledge of the Company, circumstance exists that (with or without notice or
lapse of time): (a) may constitute or result in a violation by the Company or
any of its Subsidiaries, or a failure on the part of the Company or its
Subsidiaries to comply with, any Legal Requirement; or (b) may give rise to any
obligation on the part of the Company or any of its Subsidiaries to undertake,
or to bear all or any portion of the cost of, any remedial action of any nature
in connection with a failure to comply with any Legal Requirement, except in
either case that would not reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has received any notice
or other communication from any regulatory authority or any other person, nor
does the Company have any knowledge regarding: (x) any actual, alleged, possible
or potential violation of, or failure to comply with, any Legal Requirement, or
(y) any actual, alleged, possible or potential obligation on the part of the
Company or any of its Subsidiaries to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature in connection with a failure
to comply with any Legal Requirement, except in either case that would not
reasonably be expected to have a Material Adverse Effect.
c. The Company is in compliance in all material respects with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated thereunder that are applicable to it and has taken reasonable steps
such that the Company expects to be in a position to comply with the
requirements of Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated thereunder at such time as Section 404 becomes
applicable to the Company.
d. The Company is, and has reason to believe that for the foreseeable
future it will continue to be, in compliance with all applicable rules of the
American Stock Exchange, including all listing and corporate governance
requirements. Except as set forth on Schedule 4.10, the Company has not, at any
time since December 31, 2004, received notice from the American Stock Exchange
that the Company is not in compliance with the listing or maintenance
requirements thereof. The issuance and sale of the Shares under the Agreement
does not contravene the rules and regulations of the American Stock Exchange,
and no approval of the shareholders of the Company thereunder is required for
the Company to issue the Shares as contemplated by this Agreement.
4.11 Environmental Matters. "Environmental Laws" shall mean, collectively,
all Legal Requirements, including any federal, state, local or foreign statute,
laws, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials. Except for such matters as could not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, (i)
the Company and its Subsidiaries have complied and are in compliance with all
applicable Environmental Laws; (ii) without limiting the generality of the
foregoing, the Company and its Subsidiaries have obtained, have complied, and
are in compliance with all Permits that are required pursuant to Environmental
Laws for the occupation of their respective facilities and the operation of
their respective businesses; (iii) none of the Company or its Subsidiaries has
9
received any written notice, report or other information regarding any actual or
alleged violation of Environmental Laws, or any liabilities or potential
liabilities (including fines, penalties, costs and expenses), including any
investigatory, remedial or corrective obligations, relating to any of them or
their respective facilities arising under Environmental Laws, nor, to the
knowledge of the Company is there any factual basis therefore; (iv) there are no
underground storage tanks, polychlorinated biphenyls, urea formaldehyde or other
hazardous substances (other than small quantities of hazardous substances for
use in the ordinary course of the operation of the Company's and its
Subsidiaries' respective businesses, which are stored and maintained in
accordance and in compliance with all applicable Environmental Laws), in, on,
over, under or at any real property owned or operated by the Company and/or its
Subsidiaries; (v) there are no conditions existing at any real property or with
respect to the Company or any of its Subsidiaries that require remedial or
corrective action, removal, monitoring or closure pursuant to the Environmental
Laws and (vi) to the knowledge of the Company, neither the Company nor any of
its Subsidiaries has contractually, by operation of law, or otherwise amended or
succeeded to any liabilities arising under any Environmental Laws of any
predecessors or any other Person.
4.12 Title to Property. Except for any lien for current taxes not yet
delinquent or which are being contested in good faith and by appropriate
proceedings, the Company and its Subsidiaries have good and marketable title to
all real property and all personal property owned by them which is material to
the business of the Company and its Subsidiaries. Any leases of real property
and facilities of the Company and its Subsidiaries are valid and effective in
accordance with their respective terms, except as would not have a Material
Adverse Effect.
4.13 No Investment Company or Real Property Holding Company. The Company is
not, and upon the issuance and sale of the Shares as contemplated by this
Agreement will not be, an "investment company" as defined under the Investment
Company Act of 1940 ("Investment Company"). The Company is not controlled by an
Investment Company. The Company is not a United States real property holding
company, as defined under the Internal Revenue Code of 1986, as amended.
4.14 No Brokers. Other than its arrangements with Energy Capital Solutions,
LLC and ▇▇▇▇▇▇▇▇▇ Capital Partners, LLC (the "Placement Agents"), which have
been disclosed to the Buyer, the Company has taken no action which would give
rise to any claim by any person for brokerage commissions, transaction fees or
similar payments relating to this Agreement or the transactions contemplated
hereby.
4.15 Registration Rights. Except pursuant to the Registration Rights
Agreement, effective upon the Closing, neither the Company nor any Subsidiary is
currently subject to any agreement providing any person or entity any rights
(including piggyback registration rights) to have any securities of the Company
or any Subsidiary registered with the SEC or registered or qualified with any
other governmental authority.
4.16 Exchange Act Registration. The Common Stock is registered pursuant to
Section 12(g) of the 1934 Act, and the Company has taken no action designed to,
or which, to the knowledge of the Company, is likely to have the effect of,
terminating the registration of the Common Stock under the 1934 Act. The Company
is eligible to register its Common Stock for resale under Form S-3 promulgated
under the 1933 Act.
10
4.17 Labor Relations. No labor or employment dispute exists or, to the
knowledge of the Company, is imminent or threatened, with respect to any of the
employees of the Company that has, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
4.18 Transactions with Affiliates and Employees. Except as set forth in the
SEC Documents, none of the officers or directors of the Company, and to the
knowledge of the Company, none of the employees of the Company, is presently a
party to any transaction or agreement with the Company (other than for services
as employees, officers and directors) exceeding $60,000, including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
4.19 Insurance. The Company and its Subsidiaries have insurance policies in
full force and effect of a type, covering such risks and in such amounts, and
having such deductibles and exclusions as are customary for conducting
businesses and owing assets similar in nature and scope to those of the Company
and its Subsidiaries. The amounts of all such insurance policies and the risks
covered thereby are in accordance in all material respects with all material
contracts and agreements to which the Company and/or its Subsidiaries is a party
and with all applicable Legal Requirements. With respect to each such insurance
policy: (i) the policy is valid, outstanding and enforceable in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws in
effect that limit creditors' rights generally, equitable limitations on the
availability of specific remedies and principles of equity (regardless of
whether such enforcement is considered in a proceeding in law or in equity);
(ii) neither the Company nor any of its Subsidiaries is in breach or default
with respect to its obligations thereunder in any material respect; and (iii) no
party to the policy has repudiated, or given notice of an intent to repudiate,
any provision thereof.
4.20 Approved Acquisitions of Shares; No Anti-Takeover Provisions. Subject
to and contingent on the Buyer's covenant in Section 5.7, the Company has taken
all necessary action, if any, required under the laws of the State of Nevada or
otherwise to allow the Buyer to acquire the Shares pursuant to this Agreement
and further to allow the Buyer to, without further approval of the Company's
Board of Directors, acquire in the future additional shares of Common Stock,
until such time as the Buyer owns 15% of the then-outstanding Common Stock. The
Company has no control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company's Restated Articles of Incorporation
or bylaws, each as amended (or similar charter documents), that is or could
become applicable to the Buyer as a result of the Buyer and the Company
fulfilling their obligations or exercising their rights under this Agreement,
including without limitation the Company's issuance of the Shares and the
Buyer's ownership of the Shares and Buyer's acquisition in the future of
additional shares of Common Stock until such time as the Buyer owns 15% of the
then-outstanding Common Stock.
4.21 Disclosure. The Company understands and confirms that the Buyer will
rely on the representations and covenants contained herein in effecting the
transactions contemplated by this Agreement and the other Transaction Documents.
All representations and warranties provided to the Buyer including the
disclosures in the Company's disclosure schedules attached hereto furnished by
or on behalf of the Company, taken as a whole are true and correct and do not
contain any untrue statement of material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or
its Subsidiaries or its or their businesses, properties, prospects, operations
or financial conditions, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but which has not been
so publicly announced or disclosed.
11
ARTICLE 5
COVENANTS
5.1 Form D; Blue Sky Laws. Upon completion of the Closing, the Company
shall file with the SEC a Form D with respect to the Shares as required under
Regulation D and each applicable state securities commission and will provide a
copy thereof to the Buyer promptly after such filing.
5.2 Use of Proceeds. The Company shall use the proceeds from the sale of
the Shares for general corporate purposes, including acquisitions and repayment
of Company debt.
5.3 Expenses. At the Closing, the Company shall reimburse the Buyer for all
reasonable expenses incurred by it in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the other
Transaction Documents and its due diligence review of the Company, including,
without limitation, reasonable attorneys' fees and expenses, and out-of-pocket
travel costs and expenses. The Company shall be responsible for all placement
fees, and other fees and expenses of the Placement Agents.
5.4 Listing. Prior to the filing of any registration statement that is
required under the Registration Rights Agreement, the Company will obtain and,
so long as the Buyer owns any of the Shares, maintain the listing and trading of
the Shares on the American Stock Exchange or any equivalent replacement exchange
and will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the National Association of Securities
Dealers and such exchanges, as applicable.
5.5 No Integration. The Company shall not make any offers or sales of any
security (other than the Shares) under circumstances that would require
registration of the Shares being offered or sold hereunder under the 1933 Act or
cause the offering of the Shares to be integrated with any other offering of
securities by the Company in such a manner as would require the Company to seek
the approval of its stockholders for the issuance of the Shares under any
stockholder approval provision applicable to the Company or its securities.
5.6 Restriction on Short Sales. For a period of one hundred eighty (180)
days after the Closing Date, the Buyer shall not, and the Buyer shall cause its
affiliates to further agree to not, enter into or effect any "short sale" (as
such term is defined in Rule 200 of Regulation SHO promulgated under the ▇▇▇▇
▇▇▇) of the Shares purchased hereunder, foreign market listing or hedging
transaction which establishes a short portion with respect to the Shares
purchased hereunder.
5.7 Future Acquisitions Subject to Board Approval. The Buyer agrees that it
shall not, directly or indirectly, alone or in concert with any other person or
entity, acquire, whether from the Company, on the open market or otherwise,
shares of Common Stock of the Company (or securities convertible into Common
Stock of the Company) if, after giving effect to the acquisition of such Common
Stock, the Buyer and its affiliates would own in excess of 15% of the
then-outstanding Common Stock; provided, however that this covenant shall not
apply to (a) any acquisitions of Common Stock (or securities convertible into
Common Stock) approved in advance by the Company's Board of Directors, (b) any
increase in the Buyer's percentage ownership of Common Stock due to a redemption
or repurchase by the Company of any of its Common Stock, or (c) any instances
where the Buyer inadvertently acquires in excess of 15% of the then outstanding
Common Stock, provided that in such case Buyer shall notify the Company in
writing immediately upon discovery of such inadvertent acquisition, and Buyer
shall immediately take all such actions as are necessary to cure such
circumstance within thirty (30) days of providing such notice unless the
Company's Board of Directors approves such inadvertent acquisition.
12
ARTICLE 6
CONDITIONS TO THE COMPANY'S OBLIGATION
The obligation of the Company hereunder to issue and sell the Shares to a
Buyer at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions thereto, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion:
6.1 Delivery of Transaction Documents. Each Buyer shall have executed and
delivered the Transaction Documents to the Company.
6.2 Payment of Purchase Price. Each Buyer shall have delivered the Purchase
Price in accordance with Section 2.2 above.
6.3 Representations and Warranties. The representations and warranties of
the Buyer shall be true and correct in all material respects (provided, however,
that such qualification shall only apply to representations or warranties not
otherwise qualified by materiality) as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the applicable Buyer shall
have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the applicable Buyer at or prior to the Closing
Date.
6.4 Litigation. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
ARTICLE 7
CONDITIONS TO EACH BUYER'S OBLIGATION
The obligation of the Buyer hereunder to purchase the Shares at the Closing
is subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the Buyer's sole
benefit and may be waived by the Buyer at any time in its sole discretion:
7.1 Delivery of Transaction Documents; Issuance of Shares. The Company
shall have executed and delivered the Transaction Documents to the Buyer, and
shall deliver the Transfer Instructions to the transfer agent for the Company's
Common Stock to issue certificates in the name of the Buyer representing the
Shares being purchased by the Buyer. The Company shall deliver a copy of the
Transfer Instructions to the Buyer at the Closing.
7.2 Representations and Warranties. The representations and warranties of
the Company shall be true and correct in all material respects (provided,
however, that such qualification shall only apply to representations or
warranties not otherwise qualified by materiality) as of the date when made and
as of the Closing Date as though made at such time (except for representations
and warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date.
13
7.3 Consents. Any consents or approvals required to be secured by the
Company for the consummation of the transactions contemplated by the Transaction
Documents shall have been obtained and shall be reasonably satisfactory to the
Buyer.
7.4 Litigation. No Action shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
7.5 Opinion. The Buyer shall have received an opinion of the Company's
counsel, dated as of the Closing Date, in form, scope and substance reasonably
satisfactory to the Buyer with respect to the matters set forth in Exhibit B
attached hereto.
7.6 No Material Adverse Change. There shall have been no material adverse
change in the assets, liabilities (contingent or otherwise), affairs, business,
operations, prospects or condition (financial or otherwise) of the Company prior
to the Closing Date).
7.7 Board Approval. Subject to and contingent on the Buyer's covenant in
Section 5.7, the board of directors of the Company shall have adopted
irrevocable resolutions approving and exempting from ss.ss.78.411 to 78.444,
inclusive, of the Nevada Revised Statutes, the transactions contemplated by the
Agreement and any future issuance or sale to Buyer, or any purchases by Buyer,
of Common Stock (or securities of the Company that are convertible into, or
exchangeable for, Common Stock).
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Company. The Company agrees to indemnify the
Buyer and its affiliates and hold the Buyer and its affiliates harmless from and
against any and all liabilities, losses, damages, costs and expenses of any kind
(including, without limitation, the reasonable fees and disbursements of the
Buyer's counsel in connection with any investigative, administrative or judicial
proceeding), which may be incurred by the Buyer or such affiliates as a result
of any claims made against the Buyer or such affiliates by any person that
relate to or arise out of (i) any breach by the Company of any of its
representations, warranties or covenants contained in this Agreement or in the
Transaction Documents (other than the Registration Rights Agreement, which
contains separate indemnification provisions), or (ii) any litigation,
investigation or proceeding instituted by any person with respect to this
Agreement or the Shares (excluding, however, any such litigation, investigation
or proceeding which arises solely from the acts or omissions of the Buyer or its
affiliates).
8.2 Notification. Any person entitled to indemnification hereunder will (i)
give prompt notice to the Company of any claim with respect to which it seeks
indemnification (but omission of such notice shall not relieve the Company from
liability hereunder except to the extent it is actually prejudiced by such
failure to give notice) and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest may exist between such indemnified party and the
Company with respect to such claim, permit the Company to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party. If
such defense is not assumed by the Company, the Company will not be subject to
14
any liability for any settlement made without its consent (but such consent will
not be unreasonably withheld). The Company will not consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of an unconditional release from all liability in respect to such claim or
litigation. If the Company elects not to or is not entitled to assume the
defense of a claim, it will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified with respect to such claim,
unless an actual conflict of interest exists between such indemnified party and
any other of such indemnified parties with respect to such claim, in which event
the Company will be obligated to pay the fees and expenses of such additional
counsel or counsels.
ARTICLE 9
GOVERNING LAW; MISCELLANEOUS
9.1 Governing Law. This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of Nevada applicable to
agreements made and to be performed entirely within such state, without regard
to the principles of conflict of laws. The parties hereto hereby submit to the
exclusive jurisdiction of the United States Federal Courts located in Houston,
Texas with respect to any dispute arising under this Agreement, the agreements
entered into in connection herewith or the transactions contemplated hereby or
thereby. All parties irrevocably waive the defense of an inconvenient forum to
the maintenance of such suit or proceeding. All parties further agree that
service of process upon a party mailed by first class mail shall be deemed in
every respect effective service of process upon the party in any such suit or
proceeding. Nothing herein shall affect any party's right to serve process in
any other manner permitted by law. All parties agree that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
The party which does not prevail in any dispute arising under this Agreement
shall be responsible for all fees and expenses, including attorneys' fees,
incurred by the prevailing party in connection with such dispute.
9.2 Counterparts; Electronic Signatures. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party. This Agreement, once executed by a party, may be delivered to the other
party hereto by electronic transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
9.3 Headings. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.
9.4 Severability. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform to such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.
9.5 Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein. No provision of this Agreement may be
waived other than by an instrument in writing signed by the party to be charged
with enforcement. The provisions of this Agreement may be amended only by a
written instrument signed by the Company and the Buyer.
15
9.6 Notices. Any notices required or permitted to be given under the terms
of this Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:
If to the Company:
ENGlobal Corporation
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Governance Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
Jenkens & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Buyer:
Tontine Capital Partners, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
Barack ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each party shall provide notice to the other party of any change in address.
16
9.7 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns. Neither the
Company nor the Buyer shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other.
9.8 Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.
9.9 Publicity. The Company and the Buyer shall have the right to review a
reasonable period of time before issuing any press releases or any other public
statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of the
Buyer, to make any press release with respect to such transactions as is
required by applicable law and regulations (although the Buyer shall be
consulted by the Company in connection with any such press release prior to its
release and shall be provided with a copy thereof and be given an opportunity to
comment thereon). Notwithstanding the foregoing, the Company shall file with the
SEC a Form 8-K disclosing the transactions herein within four (4) business days
of the Closing Date and attach the relevant agreements and instruments to either
such Form 8-K or the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2005, and the Buyer may make such filings as may be required
under Section 16 of the 1934 Act.
9.10 Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
9.11 No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
9.12 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered cumulative with and in addition to
any other rights, powers and remedies which such parties may have at law or in
equity in the event of the breach of any of the terms of this Agreement. The
exercise or partial exercise of any right, power or remedy shall neither
constitute the exclusive election thereof nor the waiver of any other right,
power or remedy available to such party.
9.13 Survival. Any covenant or agreement in this Agreement required to be
performed following the Closing Date, shall survive the Closing Date. Without
limitation of the foregoing, the respective representations and warranties given
by the parties hereto shall survive the Closing Date and the consummation of the
transactions contemplated herein, but only for a period of the earlier of (i)
five years following the Closing Date and (ii) the applicable statute of
limitations with respect to each representation and warranty, and thereafter
shall expire and have no further force and effect.
9.14 Knowledge. The term "knowledge of the Company" or any similar
formulation of knowledge shall mean, the actual knowledge after due inquiry of
an executive officer of the Company.
[Signature Page Follows]
17
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first above written.
COMPANY:
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ENGLOBAL CORPORATION
By:
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Title:
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BUYER:
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TONTINE CAPITAL PARTNERS, L.P.
By:
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Title:
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18
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
FORM OF LEGAL OPINION
